Firm-level agreements in centralized countries reduce wage rigidity, aiding economic flexibility.
The article looks at how wages change in different sectors in Belgium, Denmark, Spain, and Portugal. The researchers studied how resistant wages are to going down when economic conditions are tough. They found that in countries where wages are set by agreements between companies, wages are more likely to go down when needed. This means that when companies can negotiate wages themselves, they are more flexible in adjusting to changes in the economy.
